The Securities and Exchange Board of India (SEBI) has announced proactive measures to ensure trading continuity during technical outages at the country’s major stock exchanges. This initiative, aimed at protecting investors, designates the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) as alternative trading venues for one another. A joint Standard Operating Procedure (SOP) will be crafted by both exchanges, detailing the necessary steps and roles during such outages. According to a SEBI circular, this collaborative approach between the NSE and BSE will outline how activity flows between the affected exchange and its alternative, ensuring a seamless transition.
SEBI also requires that this SOP be submitted within 60 days of the circular’s release. The initiative targets potential risks for investors with open positions during outages, such as price volatility influenced by unforeseen news developments. By using the interoperability of clearing corporations, investors will have the flexibility to hedge or offset positions through an alternative exchange.
Furthermore, SEBI has instructed exchanges to make accommodations for securities exclusively listed on a single exchange or those lacking counterparts on other platforms. This involves the introduction of reserve contracts or similar index derivatives to maintain hedging options for investors. While the framework’s implementation date is set for April 1, 2025, this timeline gives exchanges and clearing corporations ample opportunity to develop the necessary infrastructure and update by-laws.
These measures underline SEBI’s commitment to minimizing trading disruptions and upholding investor confidence in India’s financial markets. As exchanges gear up for these changes, the groundwork for a more resilient trading environment is being laid, promising enhanced protection and operational continuity for the future.
Original Story https://www.cnbctv18.com/market/sebi-circular-bats-for-nse-bse-to-be-backup-trading-platforms-for-each-other-19516552.htm
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